You are employed as a commercial buyer for a major Australian retail company named Clothing Galore Pty Ltd (‘Clothing Galore’). Your role requires you to arrange commercial contracts between wholesale suppliers of clothing, and your company Clothing Galore.
Last week, the following events happened:
1. On Wednesday at 10.00AM, you received an email promotion from a wholesale t-shirt supply company called T-Shirts ‘R’ Us Pty Ltd (‘T-Shirts ‘R’ Us’). The email states: ‘Fantastic offer! Purchase 1,000 t-shirts for $1.00 each. Normally $5.00 each.’
2. At 12.00 noon on Wednesday, you contact T-Shirts ‘R’ Us via email, where you write: ‘Great deal. I need to order 2,000 t-shirts. 1,000 in pink and 1,000 in green. Total $2,000. Please send order to delivery address at the bottom of this email.’
3. At 3.00PM on Wednesday, T-Shirts ‘R’ Us reply to the email you sent at 12.00 noon. They write: ‘Thank you for your email. We do not supply green t-shirts. Instead, we could sell you 1,000 blue t-shirts. Confirm via return email if you would like to proceed with the order.’
4. At 3.15PM that same day, you respond to T-Shirts ‘R’ Us, again by email, ordering 1,000 pink t-shirts and 1,000 blue t-shirts.
5. That evening, your boss emails you urgently saying: ‘Due to the new Barbie movie, pink items are selling fast!! Order only pink clothing! No orders for clothing in other colours will be approved for purchase.’ In a panic, you email T-Shirts ‘R’ Us at 7.00PM on Wednesday and write: ‘Urgent! Cancel blue t-shirts in order. Send 2,000 pink t-shirts instead!’
6. T-Shirts ‘R’ Us are busy packing your original order of t-shirts at the time and do not notice your 7.00PM email. Instead, on Thursday at 9.00AM, they send you an email confirming that your order has been shipped with 1,000 pink and 1,000 blue t-shirts.
You are worried that you may have negotiated a contract with T-Shirts ‘R’ Us that includes 1,000 blue t-shirts. Concerned that your boss will be angry, you ask a Generative AI system to advise you of the contract law implications of this scenario. The Generative AI system you use provides the following response:
‘The question at hand is whether the contract is for 1,000 pink and 1,000 blue t-shirts, or simply 2,000 pink t-shirts. A valid contract requires a clear offer and acceptance. T-Shirts ‘R’ Us initially offered 1,000 t-shirts for the price of $1.00 each. The user accepted 1,000 pink and 1,000 green t-shirts for $2,000. In response, T-Shirts ‘R’ Us made a counteroffer with 1,000 blue t-shirts. The user accepted this counteroffer, amending the original order. The user’s boss had requested 2,000 pink t-shirts, but T-Shirts ‘R’ Us shipped the original order without confirming the changes. As a result, the user is now obliged to purchase 1,000 pink and 1,000 blue t-shirts, rendering the original contract enforceable.’
Identify the elements of the IRAC method that are reflected in this response. That is, identify which sentence(s) addresses the issue, rule, application, and conclusion steps of the IRAC process.
Present a clear overview of the legal situation to your boss. You are therefore required to write a new response that accurately addresses the question of whether you have negotiated a legally binding contract. You should consider if you have a contract to purchase 1,000 blue and 1,000 pink t-shirts, or instead to purchase 2,000 pink t-shirts. You must refer to our contract law course materials to support your response.
Please address contract law rules relating to agreement only. (Intention to create legal relations and consideration are not part of this test’s assessable content. You should assume that there are no issues arising in relation to those requirements. You also do not need to address issues relating to the Australian legal system or business ethics in answering this particular question.)
Ensure that you fully explain your answer, and that you apply relevant sources of law (case law and legislation) as appropriate.
